While best known in the anglophonic world for his work on sexual deviations and his advocacy for degeneration theory, Richard Krafft-Ebing (RKE) (1840–1902) was a major figure in late-19th century European psychiatry and author of the most widely read German psychiatric textbook of that era. With the goal of (re-)introducing his work to an anglophonic audience, we review and provide an historical context for RKE's etiologic theory of major psychiatric illness. RKE saw psychiatric disorders as multifactorial, arising from two sets of etiologic factors: predisposing and exciting. Exciting causes were either psychological or physical, while predisposing causes were either general (e.g. sex, occupation, age) or individual-specific. Three major individual-specific risk factors were of particular importance: heredity, personality and education/rearing. Hereditary factors were typically the most important but were usually non-specific in their effect with the forms of psychiatric illness often differing in close relatives. He emphasized the importance of the ‘neuropathic personality,’ which rendered affected individuals sensitive to the pathogenic effects of various exciting influences. Poor rearing could also substantially increase risk for major mental illness. RKE saw the influences of hereditary and rearing factors on psychiatric illness as often mediated through a neuropathic personality. While RKE believed in degeneration theory and emphasized the potential etiologic importance of masturbation in psychiatric illness, his clinical writings were otherwise characterized by a broad-minded and sensible approach that lacked the narrowness of the strongly brain-based or psychoanalytic psychiatric schools which were very influential during and shortly after his life.